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The Kudlow Report

News/Business. Larry Kudlow. Larry Kudlow provides his unique perspective on business, politics and investing. New.

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Collins 7, Washington 6, Texas 6, Spiriva 6, Brazil 5, Kansas City 5, Us 5, United States 5, Rick Perry 5, Bernanke 5, George Gilder 4, Fbi 4, New York 4, Nsa 4, Kudlow 4, Copd 3, Eamon 3, Yemen 3, Europe 3, Don 3,
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  CNBC    The Kudlow Report    News/Business. Larry Kudlow. Larry Kudlow provides his  
   unique perspective on business, politics and investing. New.  

    June 18, 2013
    7:00 - 8:01pm EDT  

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all right. while waiting for the we're wai fed. there's always a bull market somewhere. right here on "mad money", i'm jim cramer. see you tomorrow. top federal intelligence and surveillance people go on the offensive and start offering details about attacks they say were flawed by the nsa surveillance program. here's the headline. many would be attacks and the plot to blow up the new york stock exchange. we have a live report coming up. tonight, the speculation is growing over who will replace fed chairman ben bernanke. or did president obama fire him last night. we have that story, too. as everyone is watching bernanke and the fed, i say the bull market has plenty of room to run and i'll explain why.
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the "the kudlow report" beginning right now. the head of the nsa says the snooping program works. it stopped 50 attacks including one on the new york stock exchan exchange. eamon javers has the report. >> the house intelligence committee is eager to explain why these programs are legal and effective saying that they've succeeded in stopping terrorist attacks. here's the fbi's shaun joyce laying out an alleged possible attack against the new york stock exchange. take a listen. >> nsa utilizing 702 authority identified an extremist located in yemen. this extremist located in yemen was talking with an individual
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located inside the united states in kansas city, missouri. that individual was identified as khalid ouazani. the nsa served legal process. we went up on electronic surveillance and identified his co conspirators. this was the plot that was in the very initial stages of platting to bomb the new york stock exchange. we were able to disrupt the plot. we were able to lure some individuals to the united states and we were able to effect their arrest and they were convicted for this terrorist activity. now the key phrase here appears to be the very initial stages of this. now sabrihan hasanoff is the man who the government says conducted surveillance on the new york stock exchange and conducted the surveillance on people that appeared to do some harm. he said i did supply very basic
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information about the nyse but deliberately provided nothing beyond what anyone could have learned from google earth. larry, what the government appears to be alleging here is that hasanoff was involved in surveillance of the nyse with a person known as the doctor and what he apparently told them through an intermediary perhaps was that the new york stock exchange had quite a bit of security and that anybody approaching it would have to approach on foot. i can tell you that i talked to his lawyer today. he said he was surprised to see his client's case show up as one of the keynote cases here in the nsa surveillance situation. he said this case was a big nothing. he said he thought it was a joke, that they're being used in this case in the defense of the nsa. >> that is so important. first of all, great reporting. look, everybody wants to know if this surveillance program is working. i mean, that's one of the key controversial issues. when i hear you describe the
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nyse situation, eamon, it doesn't sound like the surveillance had much to do with it at all. >> reporter: right. the question is how did they pick this guy up. the attorney says he doesn't know exactly what the classified information was. what the officials on capitol hill today said they were able to get communications between a person in the united states and the person in yemen and that communication using the so-called 702 authority was what allowed them to start wrapping up this plot for a nascent attack on the new york stock exchange. >> what happened to the guy in kansas city? >> reporter: both of these individuals are awaiting sentencing at this point. a lot of these documents that we're looking at come from the government sentencing memos in which they lay out their best explanation of what happened here and why some of these people need to have long jail time. >> okay. so just before we get to our special guest, don clark, let me wrap this up. so, therefore, the yemen to kansas city connection did come from the surveillance, is that fair?
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>> reporter: that's correct. >> the final new york stock exchange attack may not have, but that connection did and you say they're both going to jail or just the kansas city guy? >> reporter: well, we're waiting on sentencing in both of these cases. in the kansas city case, that was surveillance that turned up in the nsa according to government officials today. officials i talked to today said that that individual became a cooperating witness in the case against the individual, hasanoff, who did the surveillance against the new york stock exchange and that's how they were able to roll up that plot, because they were able to intercept communications between hasanoff and others in which he reported that the stock exchange had security. you couldn't approach it by stock. he said, this is something you couldn't have found out on google earth. two sides of the story. >> there's a yes and maybe there's a no. stay with me, eamon. let's bring in don clark. a former fbi special agent in charge of the new york and houston divisions. don, nice to see you again.
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thank you. here's the thing, there are people who are questioning the utility of the surveillance. not simply whether -- i mean, i know it's legal. i, frankly, don't have any problem with this. it's a lawful operation. people are saying, did it really do anything? in the testimony today, here's my question to you, first the testimony said they had 50 cases, then the testimony later on under questioning said, well, we had something like approaching ten cases. that doesn't seem convincing to me. you tell me. >> well, i don't think it's a matter of the number of cases that you may have because if they said they had 50 cases in the initial part of this, their investigation, they probably did, but there may have been once they continued to investigate these cases to see what information that they really did have and to what extent that this was going to really harm the united states and get that going, then i could see them saying, okay, this we can move to one side and now we
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can go at the real serious aspects of what's taking place because there are a lot of little things that take place, you know? there are a lot of people that get arrested every day about some little thing and they say, okay, we'll cut them loose for this, but for something that's really significant, i think that's what the fbi and this program is about, is to try to make sure that the americans can have that freedom of going and coming without worrying that someone's going to blow up a train that they're on. >> all right. i understand that, but, again, i'm going to leave the prism alone. i'm going to leave the foreign part alone because i think the foreign part is very clear. regard being the domestic part, call it the meta data. if everyone's getting their phone records collected, i'm not saying read, i'm just saying collected and where the time was, what the number was, if tens of millions of people are going to have that, at some point, don, they're going to want to know what we've got for that intrusion, okay? it's an issue of national
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security, i get that. we're at war with terrorism. i get that. people are going to ask that tough question, and i guess my question to you is does the nsa, does the fbi and the other organizations, will they have the right answers? will they have public answers? >> well, i think they will, and i can speak for, of course, my days with the fbi and working these very types of activities. it's very, very difficult to be able to listen to someone's phone and to gather this type of information. and i think without probable cause i would say that it's very -- that i would wager that probably that's not the case, that without probable cause to go through and with probable cause you've got to get a judge to believe that, hey, yes, i really do have the evidence to show you that there may be something going on here and you move forward with. but just to collect it to collect it, then i'm not certain that that's maybe the best way to go. >> that's right.
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eamon, was there much push back in the hearing today on these issues? that is to say, how successful is the whole program? and the whole issue of fiza that don is talking about, if there's reasonable probability you can go in and actually look at the content? was there much push back? was there many calls for reform or openness or changes in the program? >> reporter: there was a little bit of push back, larry, but this was the house intelligence committee and by and large the members of the house intelligence committee believe that this program was helpful and useful. they were at pains trying to help them explain why it was lawful and useful. to be fair to the law enforcement officials, when you're dealing with cases where they're preventing an attack, a bomb didn't go off, somebody wasn't killed, it's something that didn't happen, it's the dog that didn't bark. in retrospect a lot of those cases are sort of insignificant. imagine if you had caught the boston bombers, for example, tsarnaev, before the attack happened at the boston marathon.
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this guy is kind of a strange guy, he was into martial arts, what do you make of that? he seems like he's relatively harmless but then the bomb goes off. >> they missed that one. >> it's a whole different character. it happens. but if you catch these cases before they happen, it's very difficult in retrospect to look back at it and say how dangerous was this because something didn't happen? >> i appreciate that very much. don clark, i want to finish with you. >> yes. >> ray kelly, top cop in the country, i don't know if you saw the headline, but i want to get your take on it. kelly says the nsa should come clean about domestic spying. he says, i don't think it should ever have been secret and kelly said i think the american public can accept the fact if you tell them that every time you pick up the phone it's going to be recorded and it goes to the government. i think the public can understand that. i see no reason why that program was placed in the secret category. what's your take on ray kelly's
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criticism? >> well, i'm not only a fan but a close friend with ray kelly and i think he has good logic in his investigative capability and the whole thing and i'm not trying to put words in his mouth. he certainly can put him in his own is what really does it take and what is really an impact on the service and are we really searching behind every citizen to see what every citizen is doing every moment that they're taking or are we really trying to not mislead and not take information and gather information that when something does happen you and i both know what happens here is that, oh, you should have known. >> see, that's the thing. if the government had put this out, don, if the government had put this out explaining it -- i mean, last night president obama i thought did a good job explaining the issues on charlie rose. i applauded president obama last night. if he or others in the government had explained to people what's going on, that this is collection, that this is
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about phone numbers and time, this is not about actually reading the e-mails or taping the phone, if people knew that ahead of time without learning from this crazy kid snowden, i think we would all be better off today. i really do. excessive secrecy and too much classified information did a lot of harm do the credibility of this program which i think is necessary. >> larry, you won't get an argument from me on that, larry. i agree with you. sometimes when we, the law enforcement, don't get the information out there and don't get it in a manner that everybody kind of understands it, i think most people will step back and say, okay, let's go for this. >> that's true. that's right. >> sometimes when we don't say things. >> too many secrets. eamon, i'll let you wrap up. >> reporter: i want to follow up on your point. we may be getting to a point where we're beyond the ability of the government to keep secrets. look at this case. look at the case of the chinese.
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they weren't able to keep their corporate espionage efforts secret. organizations are having a hard time keeping things secret, facebook and ding tall technology. even mitt romney and the 47% video. technology, digital technology and the pervasiveness of it in our society makes it hard to keep secrets. >> i'm a follow lower of the late great senator pat moynihan who wrote an entire book about why the government keeps far too many secrets, and we should have a whole declassification. you know, i don't mean the fizer court part, that's different, but i'm saying if the public had known precisely what this is, then the misinformation would not have taken over and this thing would have been a small story because actually this has been out for years. this has been out there for years. eamon javers, thank you very much. mr. don clark, thank you. let's move onto the markets. two straight days for triple
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digits for the dow. the bulls are running again. i'm going to tell you why. please don't forget, free market capitalism is the best form of prosperity. that's what governor rick perry believes. i had lunch with him. he's trying to lure businesses to texas. he's actually joining us live on set tomorrow night. this is just one part of his pitch. >> there's a lot of relocation going on. there's a lot of expansion going on in america today, so the states that have tax policy, regulatory policy that fits into your scheme, if you will, are going to be the states that get ahead. vo: traveling you definitely end up meeting a lot more people but
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a friend under water is something completely different. i met a turtle friend today so, you don't get that very often. it seemed like it was more than happy to have us in his home. so beautiful. avo: more travel. more options. more personal. whatever you're looking for expedia has more ways to help you find yours.
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we're back with "the kudlow report." i'm larry kudlow. looking at markets, here's what you need to know. two consecutive 100 point market days. one point i want to make is long-term interest rates, which have jumped about 50 bases points, i think they have peaked. they've already discounted slower fed bond purchases which, by the way, i don't think is going to happen for many, many months. second point on rates. 1% subdued inflation, we had a low cpi today, and roughly 2%
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under performing economy, there's just no reason for interest rates to jump higher. the u.s., by the way, is really the only global stock market game in town. our companies are profitable. so at these levels it may not be roaring bullish. i don't think the fed is going to taper down tomorrow, and i do believe the bull market is far from over. that's my take. let's welcome kenneth heed ner. and i'm joined by george gilder. he has the book "knowledge is power." ken, what say you? >> i say that we have a number of years of growth ahead of us in the economy. it's growing at 2%. it's going to accelerate as consumer confidence rises with rising housing prices. we'll see 3, 4, 5% growth rate. >> 3, 4, 5%, those are big
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numbers. you had an okay housing number today but housing starts are up 29% on year. here's my inflation point. the year-to-year cpi, 1.4%. guys like me two years ago worry about inflation, money printing, i was wrong. i said that before. the best set indicator, 1.0%. without inflation, why should inflation rates have to go higher? >> they go a little bit higher, but the key is our tremendous productivity in this country. even if you get labor costs up 1 or 2%, there will be no increase in unit labor costs if you get 3% productivity growth which i think is reasonable given our experience. we've got years of growth ahead of us. these are the years where the environment, where it can look ahead several years and see continued significant growth. just exactly how fast it grows is going to grow is not the problem, particularly when you're at 15 times next year's estimate in earnings which is not a cheap mogul.
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>> kep, where are you investing? what do you like the best here? >> i think this controversy has pulled back the home building stocks at a time when they were about to report increasing margins. so i think the home building stocks really stand out here because people are afraid that higher mortgage rates are going to inhibit demand. i think they're going to stimulate it. when people talk about a 4% mortgage rate as being high, with the exception of the last nine months, it hasn't been this low in 50 years. it's a bargain. >> a lot of people on wall street, a lot of people we hear on cnbc like financials, do you? >> i think the big investment banks, which everybody hates and which are being subject to regulation, are really cheap, particularly morgan stanley. here's a company that's going in the wealth management business which is a 10 to 20 pe business. the company is selling at a 6 or 7 pe based on current estimates and they're doing very well. and goldman sachs, citigroup, even citigroup is up a bit but the stock's very inexpensive and
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no one likes these. >> how about energy? how about energy, the great fracking miracle. natural gas prices have bumped back up. there's going to be some energy infrastructure buildup. what's your take on that sector, kenny? >> i think the energy revolution of the united states is really reinforcing our position in the world. the -- it's well known though, i think the stocks in a lot of cases reflect the tremendous potential and the tremendous success american companies are having in developing this resource. >> george gilder, welcome to the program. energy. fracking. horizontal join. you talk about knowledge and information. we learn a lot now and we may wind up being energy independent. let me ask you about that particular issue. >> well, i think it's been an energy miracle that is derived from a growth of knowledge in energy industry, that this is innovation and all real growth comes from innovation, not from
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increasing margins and housing builders. it comes from ingenius new ways of tapping the fossil fuels below our surface of the planet at incredible -- at ever cheaper costs and with ever less damage to the environment. >> if the government keeps its paws off it and just lets the private sector go, can an energy revolution like this carry the economy. is it, for example, in your judgment, we're technologists, is it as important as the software revolution, hardware revolution, iphone revolution? does it rank up there with those revolutions? >> yes, it does. it's vastly important to tap our energy resources. for the government to suppress our energy production is the most disruptive thing in the economy. >> all right. ken heebner, did we leave
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anything out? do you like the autos? do you like ford? do you like the retailers? >> the retailers are very attractive. ford will make a fortune in pickup trucks. the contribution in a pickup truck is 10 to 20,000 as opposed to 3 to $5,000 for a car. with construction, demand for pickup trucks is going to be surging. you'll see blowout increases in ford. ford is contracting its operations in europe and they'll minimize the damage europe does to them. >> we'll leave it there. many thanks to the great ken heebner. massive violent protests in brazil. what is this all about? one of the big answers is inflation. we'll have an explanation next up here on "kudlow."
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i've been around long enough to recognize the people who are out there owning it. the ones getting involved and staying engaged. they're not sitting by as their life unfolds. and they're not afraid to question the path they're on. because the one question they never want to ask is "how did i end up here?" i started schwab for those people. people who want to take ownership of their investments, like they do in every other aspect of their lives. so you can capture your receipts, ink for all business purchases. and manage them online with jot, the latest app from ink. so you can spend less time doing paperwork.
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and more time doing paperwork. ink from chase. so you can. massive protests in brazil. new poles about the i.r.s. scandal and a big blow to immigration reform. cnbc's seema mody has the story. >> the senate voting against the proposal that would have required the department of homeland security to build a fence on the border. senator rubio voted against it. it might be hard to get an immigration bill past the house of republicans if it doesn't include tighter borders. they say a gain of an
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immigration bill would cut $175 billion for the federal deficit over the next 20 years. economic growth and more tax revenue for the government. public opinion seems to have shifted on the i.r.s. targeting scandal. check out this latest poll. 41% believe that the decision to target conservative groups was made in the white house. only 17% believe the story about rogue agents. 82% say they'll follow the story. look at these huge protests in brazil. a scary situation. the second straight day for huge protests. they're angry about high taxes, corruption. also, brazil is spending a huge amount of money to host the world cup next year and the 2016 olympics. the protesters say the money would be better spent on schools, hospitals and other social services. >> wow. what a volatile situation. what an incredibly volatile situation. i just want to say one thing very quickly, george.
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immigration. i believe immigration is pro growth. cdo actually confirms that. >> i believe it's pro growth, but we really should focus on bringing immigrants who will reinforce their knowledge economy right today. we're inviting low income immigrants and are ejecting graduates from m.i.t. and cal tech and stanford who want to join the u.s. economy. instead we're sending them back to the middle east, china, india and -- >> braniacs i call them. >> it's a terrible mistake. >> i've got to jump out. we'll cover this later. immigration reform a good thing. thank you, seema mody. i appreciate it. markets have been in flex
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with bernanke. kudlow viewers have heard that before. >> chairman bernanke is up to capitol hill all the time. i think he's more popular there than justin bieber. next we're going to talk about who will replace bernanke if he leaves office in the next six months or did president obama just flat out fire him last night in an interview? the fans love bieber, the market loves bernanke. we'll be right back. vo: traveling you definitely end up meeting a lot more people but a friend under water is something completely different. i met a turtle friend today. avo: whatever you're looking for, expedia has more ways to help you find yours.
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today kicked off the federal reserve's two-day meeting. investors are waiting for more clarity on the fed's bond buying program, but they're also confused and uncertain about fed chairman's future. president obama spoke about that on the charlie rose show. take a listen. >> i think ben bernanke has done an outstanding job. ben bernanke is a little bit like bob muller, the head of the fbi, where he's already stayed a lot longer than he wanted or he was supposed to. >> that odd comment really shocked some top experts. just listen to what former fed governor larry meyer had to say
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about it here on cnbc earlier this evening. >> this is really remarkable. i almost fell off my chair when i heard the president's remarks last night. he essentially fired ben bernanke on the spot. >> all right. so what's ahead for chairman ber knack bernanke? is he going to stay or go? john penned obama may be ready to let bernanke go. >> when ben bernanke heard what the preds said, i think he wanted to run out on the mall and throw his hands up and quote martin luther king and say, free at last, free at last, god almighty i'm free at last. bernanke wants to leave and i think these were the words he wanted to hear. >> was he fired rudely or not? what's your take on this larry meyer thing? do you think obama resents bernanke and wanted to insult
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him or what? >> absolutely not. like i say, i think this is what bernanke wanted to hear. he wants -- his term is up in january. he wants to leave and to move on to the rest of his life and this was the -- this was basically obama saying he's not going to twist his arm like he did tim geithner and get him to try to stay. i think it was music to ben bernanke's ears. the important thing is this now starts the succession. we're going to be talking a lot over the next few months about who's going replace him. boy, what a tough job that's going to be. >> i want to start right now. a source of mine says today that if you look at the national security team, president obama, he likes loyalists, jon. >> yes. >> he likes loyalists. >> right. >> i know wall street is betting on janet young. she's no loyalist. i don't think they know each other. larry summers is a loyalist. >> right. >> i want to put that name before you because it just occurs to me that he might be a guy that's been overlooked in
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this. >> larry summers is a loyalist. i think we definitely need to keep an eye on him, but i do think that yellen is the front-runner. i'll give you an anecdote. they don't know each other very well, but they actually did talk at some length right after bill stearns collapsed in 2008. obama's economic advisor arranged a call between yellen and obama the candidate then to try to explain to him what was going on in the financial markets and what the fed was doing to respond. i wrote about this a few weeks ago. she really impressed him but she hasn't really had much of a connection with him since. >> all right. so let me just ask you, what's your -- right now your best guess on what bernanke's going to do tomorrow? in particular, the press conference and in particular, jon, will he use communication skills to say to people, wait a second, you're jumping to fast on this bond buying. we're not going to slack off? do you think he's going to let
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the conjecture continue? >> you say communication skills. i mean, i think some people in the market would question the communication skills at the fed because there's so much complication but i think we have to put the pieces together. we had the fed chairman say that they could reduce their bond buying in the next few meetings. you know, that's what the chairman said. he chooses his words carefully. i don't see why they would change that message. i think that's the message that comes out tomorrow. >> why, why, why? can i just say, this is just kudlow opinion, editorial, jon. you're the best report on the beat. but, look, we had virtually no inflation and the economy is still subpar. >> that's right. >> so using bernanke's own metrics, i don't think -- why would he want to tighten up, snuggle up, or buy fewer bonds? it's way too early for that, way too early. >> i think a lot of people are asking that question, so their starting point is september 2012
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when they launched this bond buying program. they said they wanted to see substantial improvement in the job market. well, you know, we've created almost 2 million jobs since then. the unemployment rate has come down by 1/2 percentage point. in their view they're making some progress. it will be interesting to hear how the chairman describes the progress tomorrow. they're making some progress and they should acknowledge that by pulling things back a little bit so they're not totally confident yet. >> that's where we -- i don't think they've -- george gildner, first of all, do you think bernanke should pull back in the stimulus program? >> eventually the stimulus program is noise. it distorts all economic decisions. it feeds the failures of the economy and star fs the successes. it channels money to privileged people. >> what should he do? what should he do? >> keep the dollar stable. >> ah. >> because that ripens the
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horizons of entrepreneurial investment. we now have a hypertrophy of finance in this economy. too much of the prophets of the economy is migrating to government guaranteed finance. >> big conditions, big banks. >> jon, do you hear a lot of that? >> you definitely hear a lot of it, but i think we have to keep in mind that actually inflation has been quite stable as measured -- >> no, i said that. i said that. >> the dollar has been stable, too, you know, during all of this money printing that the fed has done. you look at the exchange rated value, it's held its own. >> i agree. >> a lot of people are pouring their money into dollars because they think europe is such a -- now they're worried about places like emerging markets. >> like brazil, emerging markets. i said my mia culpa months ago. inflation is 1%. that's why i don't want the if he had -- frankly, i disagree.
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i would leave things as they are. i've got to get out. i've got to get out. >> gotcha. >> next time. jon, thank you very, very much. wall street journal. now buried in all this scandal and stock market news is the fact that we don't have anything close to a budget deal on capitol hill. i'm about to talk to one democrat and one republican senator about that and their plan to help boost small business next up on "the kudlow report." and that means growth, lots of cargo going all around the globe. cars and parts, fuel and steel, peas and rice, hey that's nice! ♪ norfolk southern what's your function? ♪ ♪ helping this big country move ahead as one ♪ ♪ norfolk southern how's that function? ♪ summer event is here. now get the unmistakable thrill and the incredible rush of the mercedes-benz you've always wanted.
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the obama economy has left many small businesses still struggling for growth despite the anemic recovery. they could get a boost if congress approves a new bipartisan plan that would revise accounting rules and reduce the tax burdens facing small business. and tonight in a great show of bipartisanship we're joined by the two senate sponsors, bob casey, democrat from pennsylvania. susan collins, republican from maine. this is an historic occasion. it's terrific. thank you both for coming back on the show. senator collins, i go to you first. what are you going to do to renovate, reinvigorate small business? >> well, i keep hearing from small businesses in my state that they're holding back on
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investing and hiring workers because of the uncertainty in our tax code, so we take several provisions that would allow for faster writeoff of equipment, for example, and startup cost and we make them permanent to provide the kind of certainty that is lacking now. >> senator casey, i think faster writeoffs are a terrific idea, . ceos tell me that. couldn't this be part of the broad base tax reform that would apply to larger businesses and smaller businesses? >> larry, there's no question that comprehensive tax reform would deal with many of these issues contained in our bill, but i'm not sure that we can wait for that moment to arrive and so the reason why this bipartisan effort that senator collins and i have been working on is so important is because
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there may be a moment this year where because we haven't come together on some other job creation strategy or even a scaled down tax reform measure that we can put this on the floor, move it forward and has great bipartisan support and as senator collins said, i've been hearing the same thing from our businesses. if they have more certainty, if they know what next year is going to bring but several years, and part of that is tax planning, i think we can move the economy forward. we're all hearing the same thing. >> good stuff. >> i think it's great stuff. i want to go on to some other things. one more, senator collins. if you have to go down could you win the vote? there's a whole lot of bills out there that do something similar to what you're doing? can you get the vote out of the senate? >> i think if we can get a vote we would win an overwhelming victory because most members realize that the majority of jobs are being created by small
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businesses and that often they don't get the attention that they deserve in washington and in our tax code. >> actually, just one more, mr. casey. are you worried -- i know you voted for obama care and so forth, but i hear -- you tell me but i hear from a lot of ceos the uncertainties to obama care, tax uncertainty, premium uncertainty, mandate uncertai y uncertainty, it's holding them back. they don't want to hire the 50th person. they don't want people to work 30 hours anymore. is obama care a detriment to the small bills world? >> there's no question that in the next few months as the affordable care act is implemented, some of that uncertainty might remain. i hear that as well. here's the biggest uncertainty of all. washington. the worry that small business owners have and large corporations have as well is that washington won't have bipartisan efforts, we can come together and move the economy
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forward, so if we can create some bipartisan moments here, that alone will provide some measure of certainty or some measure of confidence to get some things done. >> senator collins, related issue but a different issue. no budget bill. he doesn't want to sign any appropriations bills alone. he wants the large scale, grand design. we have to have appropriation bills to fund the government unless we shut it down. what's going to happen, ms. collins? >> the appropriations committee has been meeting this week and we have been reporting bills out on a bipartisan basis. what i think's going to happen is starting next week as these bills come before the full committee there will be a dispute over how much the total spending for discretionary money should be. there's the difference of between $966 billion in the
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republican plan and $1.58 trillion in the democratic plan. so we're going to have to reconcile that, but i'm still holding out hope that we're going to come together and come up with a long-term plan for a budget and that means addressing the entire budget, not just the 36% that's under the jurisdiction of the appropriations committee. >> that's very ambitious. i hope you're right. i say this, senator casey, so far the president has been very firm on this. a lot of people say i'm not worried about the debt ceiling. that doesn't come up until way later in the year, but do we have to go to the tipping resolutions, threat of a government shutdown. senator collins said there's a big gap. the sequester is the main culprit. what happens? how does this play out? >> larry, i would be the last one to make a prediction in
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washington, but here's what i hope to take off the table. let's not play games with paying our nation's bills when it comes to the debate about the debt ceiling. let's take that off the table and work together to resolve that and work together to bring some certainty, if we can use that word again, to the budgeting process and let the appropriators do their work and take these bills one at a time as we go. i'd prefer that. i think that measure of working together, that measure of regular order, to use a phrase in washington, is one way i think to bring the sides together and to begin to work together to get to a result. if that happens, i think it's a lot more likely that we can be on a path to getting a fiscal -- >> regular order is great. miss collins, i'll give you the last word. you said it could be reconciled. does that mean there's going to be an appropriations conference? again, the president seems firm if we can't get a larger deal that gets rid of the sequester,
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then he isn't going to sign anything. is a conference coming up? >> i believe we're going to conference on the budget right now. there's a big difference between the house and the senate. we ought to appoint conferees and hammer out an agreement because having a budget provides a blueprint for the entire federal government and without that blueprint it's very hard to operate and to keep control of spending. >> all right. amen to all that. thank you very much, senator bob casey and susan collins. i appreciate it. now, folks, the great george gilder has a new book out where he makes the case for internet freedom and as texas governor rick perry tours the nation, he's trying to lure businesses to move to his state. they're now putting up a fight. we'll be right back to talk about it on "kudlow."
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hey. they're coming. yeah. british. later.
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in the fight for jobs and economic expansion, republican governor rick perry of texas is taking his pro growth message into blue states and he's hoping to court more businesses to texas. yesterday governor perry made his pitch to gun manufacturers and other companies in connecticut. take a listen. >> we've told people at mossberg, people at rueger, the financial industries, pharmaceutical industries, they
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will all make a decision whether or not they want to stay in any respective state or they want to relocate. there's a lot of relocation going on. there's a lot of expansion going on in america today so the states that have tax policy that fit into their scheme, if you will, are going to be the states that get ahead. >> all right. well, i had lunch with texas governor rick perry today. i heard him speak. very good. he's going to be my special guest on the show tomorrow night. you will not want to miss that. now back with co-founder of the discovery institute, george gildner. he has a new book "knowledge and power." you're creating a new paradigm here. you're not interested in supply and demand and things like that. what are you saying? you're saying knowledge, information, and surprise, the element of surprise. help me out. >> are central to the economy. you know, all economic growth and wealth comes from
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accumulations of knowledge. as was pointed out years ago, knee and neandrethals in their caves had what we have today. all the increase in wealth comes from knowledge. knowledge is dispersed. it's in all of our heads. it's in the heads of all the entrepreneurs and workers diffused through the economy. power is increasingly centralized and it's this gap between knowledge and power that causes the prowesses of our economy. >> how do you solve that? >> giving smart people in washington power stupefies the economy. >> that's a kudlow message. >> that's a premarket message. all of creativity which drives the economy comes as a surprise to us. if it didn't, we wouldn't need it.
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and soercialism would work. information theory that was developed by claude shannon from bell labs to explain telecom and prepare for the internet defines information as surprise. so he has this whole apparatus that can accommodate in the center of economic models the surprising creations of entrepreneurs. >> all right. so that group -- >> we're all missing, patched in. >> so that includes experimentation. and you can fail you can fail but you learn from the failure, is that right? >> that's right. government guaranteed businesses are socialist. >> right. >> institutions. they're not capitalism. that's why the crony capitalism of the banking crisis, crisis of big government in socialism, not a crisis of our market economy. >> take a guess for me.
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next big surprise technological area. >> i think a big surprise, a guess, a guess is that it's increasingly becoming evident that the human body is a programmable platform, that rather than treating it as a physical and chemical system and feeding it pills and bombarding it with chemicals, instead you program the bone marrow to actually produce the molecules that are needed. we'll have trillions of ribosomes that can create any protein, any enzyme we need and there's a company that spun from the discovery institute called immusoft that's actually proving this in animal tests. >> great stuff. i've got to leave it there. george gilder, leave it there. great paradigm. his new book is called "knowledge and power." it is available in storms and
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online. tomorrow night my special guest, texas governor rick perry. he's going to tell us why he's stealing businesses from all of these blue states that don't understand low taxes and deregulation. that's it for tonight's show. i am larry kudlow. we will see you tomorrow night with governor perry. all business purchases. so you can capture your receipts, and manage them online with jot, the latest app from ink. so you can spend less time doing paperwork. and more time doing paperwork. ink from chase. so you can. ♪
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>> imagine a store with no signs in the aisles, a store that doesn't bag your purchases, one that never advertises, where you have to pay a fee just to walk in the door. who in the world would shop here? as it turns out, about 3 million fanatically loyal customers every day. it's called costco... >> i love costco. >> i bought ground beef. >> lawn furniture. >> a television. >> i bought my engagement ring here. >> ...a chain of stripped-down warehouses that's become a sensation at home and abroad. >> [ speaking chinese ] >> but its crowning